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Financial Steps To Take After A Stroke

Most financial experts advise to have at least six months of income set aside in case of an emergency. But even that isn’t enough for someone unable to return to work due to a stroke.

Most financial experts advise to have at least six months of income in a rainy-day fund in case of an emergency or job loss. But even that isn’t enough for someone unable to return to work due to a stroke. “Many people underestimate the financial severity of a disability,” said Paul Gada, personal financial planning director for the Allsup Disability Life Planning Center.

According to Gada, first steps for people who have survived a stroke or their caregivers should take include:

Make a Plan
Develop a financial plan. Establish a budget, prioritize expenses and identify how to spend down assets in the least harmful way. For example, using retirement income may trigger penalties, and charging to credit cards ultimately adds to expenses.

Cut Costs
Cut costs and identify sources of assistance for living expenses. People need to be honest about their circumstances and quickly cut discretionary spending. They also should look at how they can reduce costs for necessary expenses, such as groceries, housing and healthcare. According to the Allsup Disability Finance poll, the most common assistance people used or considered while awaiting SSDI includes:

Assistance Programs Considered or Used
Food stamps 58%
Prescription drug assistance 38%
Medicaid 36%
Utility assistance 26%
Food pantry 25%
Free health clinics 21%
Rent assistance 21%
Mortgage modification or assistance 17%
Local property tax exemptions 12%
Free meals for children (school, etc.) 9%
Emergency aid (United Way, etc.) 8%
Women, Infants and Children (WIC) nutrition 6%

Pursue Income
Pursue income sources, including SSDI and long-term disability. People with long-term disability coverage generally begin receiving benefits three to six months after onset of a disability, though this can vary based on the policy. Additionally, nearly 153 million workers are insured by the Social Security Disability Insurance program through FICA taxes they have paid and may be eligible for SSDI benefits. As it can take more than two years to be approved for benefits, and most people are denied at the initial application level, workers should apply for SSDI as soon as possible.

Keep Coverage
Don’t let healthcare coverage lapse. Individuals who don’t have coverage through a spouse’s plan may be able to secure COBRA coverage through their former employer or purchase private insurance.  Both are costly, however, and private plans can still deny coverage to people with pre-existing conditions. The Affordable Care Act created Pre-Existing Condition Insurance Plans (PCIPs) as a stopgap until 2014, when insurance companies can no longer deny someone coverage because of a pre-existing condition. However, a person needs to have been uninsured for at least six months before qualifying for a PCIP, and they can be expensive. Individuals aren’t eligible for Medicare until 24 months after they begin receiving cash SSDI benefits.

“Unfortunately, people with disabilities don’t have many good options for affordable healthcare coverage while waiting for Medicare eligibility,” Gada said. “However, to the extent possible, keeping healthcare coverage should be a priority so they can continue to get the medical care they need.”

By: Stroke-Network.com Staff Writer Amy McCraken

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"If you are diagnosed with a chronic condition that will likely require you to stop working, you need to start planning for that day as soon as possible,” Gada said. “You want to live life to the fullest, but you need to balance that with your future need for income."

Planning and Preparing for Stroke or other Disability

It’s important for people to plan financially for a disability while they are still working, Gada said. This should include:

  • Consider long-term disability (LTD) coverage. “If your employer offers long-term disability coverage, consider enrolling,” Gada advised. While many employers have been cutting back on benefits, 32 percent of private industry workers have access to LTD coverage, according to the U.S. Bureau of Labor Statistics. These policies often are subsidized by employees and generally replace 50 percent or more of a worker’s salary. Length of coverage, extent of disability and other factors can vary widely, so it’s important to understand the policy details. Individuals also can purchase a long-term disability policy on their own.

 

  • Save for disability while you are still working. While many illnesses may progress over time, stoke occurs suddenly.
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